119 N.E.3d 603
Ind. Ct. App.2019Background
- In 2009 the City of Lawrenceburg entered a Development Agreement and loaned $3,000,000 to Linkmeyer Development II, LLC (signed by Linkmeyer and Bischoff) to finance excavation/filling to make three parcels developable; personal guaranties and mortgages were executed.
- The Development Agreement required the Developer to “comply with all appropriate codes, laws and ordinances including the payment of prevailing wages for labor as required by the State of Indiana and the City of Lawrenceburg.”
- Six laborers (the Class) who worked on the project sued Linkmeyer Development, Linkmeyer, and Bischoff asserting breach of contract, violations of state wage laws, and related claims, arguing the City ordinance (Code § 33.02) required payment of prevailing wages.
- The trial court denied the Class’s motion for partial summary judgment on breach and granted the defendants summary judgment on unjust enrichment but denied defendants’ summary judgment on other claims; the parties took an interlocutory appeal from those rulings.
- Central legal questions concerned (a) whether the Class are third‑party beneficiaries of the Development Agreement and whether § 33.02 applies to the project, and (b) whether defendants were entitled to summary judgment on Indiana wage‑statute claims (arguing administrative exhaustion under the Wage Claims Statute).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Class is a third‑party beneficiary of the Development Agreement | The contract’s requirement to comply with city ordinances (including payment of prevailing wages) shows clear intent to benefit workers | No intent to benefit third parties; boilerplate language and the project was private so prevailing wages not required | Court: Contract unambiguously requires compliance with applicable ordinances; Class can be third‑party beneficiaries |
| Whether Code of Lawrenceburg § 33.02 required prevailing wages for this project | § 33.02 applies because the project was approved/financed by the city pursuant to an investment incentive (second clause) | § 33.02 applies only if approved by the dissolved Lawrenceburg Development Corporation and financed by specific bond/grant mechanisms (reading of clauses limits scope) | Court: § 33.02 ambiguous; best reading gives two alternative prerequisites (A or B). Genuine issue of material fact exists whether the project was approved/financed pursuant to an "Investment Incentive Program" |
| Whether § 33.02 is voided by the dissolution of the Lawrenceburg Development Corporation | N/A (Class relies on the ordinance’s second alternative) | Defendants argue ordinance would be a nullity if it required LLC to get approval from a dissolved entity | Court: Avoids invalidating ordinance; interprets text to preserve validity by reading alternatives so ordinance remains operative |
| Whether defendants were entitled to summary judgment on state wage claims for failure to exhaust administrative remedies | Class proceeded under Wage Payment Statute (for current or voluntarily separated employees) and need not exhaust administrative remedies | Defendants say Wage Claims Statute (which requires exhaustion) applies and Class didn’t exhaust administrative remedies | Court: Defendants did not show employees were involuntarily separated; summary judgment denied because factual dispute over which statute applies and exhaustion requirement not established by defendants |
Key Cases Cited
- Hughley v. State, 15 N.E.3d 1000 (Ind. 2014) (summary judgment burden and affirmative negation rule)
- AM Gen. LLC v. Armour, 46 N.E.3d 436 (Ind. 2015) (non‑movant must show material factual dispute; affidavits cannot create purely legal issues)
- Flaherty & Collins, Inc. v. BBR‑Vision I, L.P., 990 N.E.2d 958 (Ind. Ct. App. 2013) (elements and test for third‑party beneficiary status)
- Celadon Trucking Servs., Inc. v. Wilmoth, 70 N.E.3d 833 (Ind. Ct. App. 2017) (cannot use extrinsic evidence to vary unambiguous contract language)
- Siwinski v. Town of Ogden Dunes, 949 N.E.2d 825 (Ind. 2011) (statutory/ordinance interpretation principles)
- St. Vincent Hosp. & Health Care Ctr., Inc. v. Steele, 766 N.E.2d 699 (Ind. 2002) (distinguishing Wage Payment Statute and Wage Claims Statute based on employee status)